How A Middle Class War Born

People often misjudge another person's position due to having different definitions for the words in use.  Few people agree on what socialism really is and the same goes for capitalism.  The following is what I define as capitalism, probably more accurate would be laissez-faire capitalism:  "an economic system in which transactions between private parties are free from any form of government intervention such as regulation, privileges, imperialism, tariffs and subsidies.  Proponents of laissez faire argue for a complete separation of government from the economic sector."--Wikipedia definition.

I have spent a lot of time studying the history of money itself which gives me a unique view of historical events.  I have always approached problems/issues by trying to break down the issue to the most basic element, otherwise no complete or near-complete understand of a subject is possible.  In my opinion the lifeblood of any economy is the actual money itself.  We have all been raised in debt-based, fiat money through central banking.  It was not always this way.

The claim made by Marx was capitalism was actually an impediment to the growth of an economy.  I'm not sure what life was like in England in 1850 where Marx was, however let me introduce you to government data from time of the Robber Barons.  I would say the data shows that laissez-faire capitalism actually created the middle class.  I know of no other 60-year time frame in history where the standard of living for Average Joe increased this much.  Let me know if you have other data.  The data isn't abundant, however it's quite obvious that from 1850-1900 most jobs increased in pay by 100-171% while prices dropped.  I would bet almost everyone reading this has never seen this data mentioned anywhere.  You be the judge. (Pages listed for data are from Historical Statistics of the United States Colonial times to 1970, or History of Wages.  Link below).

USA 1850-1910

Environment:

Population

1850--25 million

1860--31 million

1880--50 million

1900--77 million

1910--91 million

Labor Force:

1850--7.7 million

1860--10.5 million

1880--17.4 million

1900--29 million

1910--37 million

Percentage of labor in agriculture:

1850--63%

1860--58.9%

1880--49.4%

1900--37.5%

1910--31%

Gold--$20/ounce 1850-1910

Introduction of paper money with Lincoln Greenbacks, eventually retired, some sporadic printing of US Notes.  All notes were redeemable in gold, otherwise why take the note?

1873--Silver dropped from bimetalism system establishing gold standard.

Taxes:

Federal Government operated almost entirely on Import Duties and Excise Taxes.  Direct taxes allowed if apportioned by the census.  If anybody is aware of an example of a direct tax from the 19th century please share.

Zero Income Tax

Zero Sales Tax

Federal Government:

2.5-3% of GDP except during war time.  Today it's 20%.

Wholesale Prices:

	Unit	1850	1880	1910
Flour	100 lbs	5.550	8.890	4.690	-15.00%	Page 225 of part 1
Sugar	1 lb	0.074	0.099	,05	-32.00%
Cotton	1 lb	0.123	0.120	0.150	22.00%
Wool	1 lb	0.883	0.081	0.084	-91.00%
Cotton Sheeting	1 yard	0.073	0.073	0.081	11.00%
Coal	1 ton	3.640	4.530	4.810	32.00%
Steel Rails	100 lbs	47.870	67.520	28.000	-42.00%
Nails	50 lbs	3.710	3.680	1.888	-49.00%
Copper	1 lb	0.215	0.215	0.129	-40.00%
Turpentine	1 gallon	0.334	0.383	0.683	104.00%
Brick	1000	4.850	6.840	5.720	18.00%

Wages:  Notice that all labor is figured as daily pay, 6 day work week.  My dad was born in 1912 and said everybody worked 6 days a week, that was life back then.  There was that much work to be done.  The demand for labor more than doubled even while the work force at least tripled.  Note also that even with wages doubling the standard workday dropped from 9 or 10 hours per day to 8.

Labor		1860	1880	1900
						Page 192 history of wages
Hod Carriers	Pennsylvania	1.13/day 54 hours/week	1.62/day 57 hours/week	2.42/day 48 hours/week		Figued at 6 day weeks
		12.5 cents/hour	17 cents/hour	30 cents/hour	171.00%
Carpenters and joiners		1.75/day 60 hours/week	2.28/day 60hours	2.8/day 48 hours/week
		17.5 cents/hour	22.8 cents/hour	35 cents/hour	100.00%
Bricklayers		2/day 54 hours/week	2.22/day 57 hours/week	4/day 48 hours/week
		22 cents/hour	0.230 cents/hour	50 cents/hour	127.00%
Marble Cutters	NY	2.04/day 60 hours/week	2.4/day 60 hours/week	4.22/day 48 hours
		20.4 cents/hour	24 cents/hour	53 cents/hour	165.00%
Manufacturing						20 year increase
	Average	1.620	2.260			37.00%	Page 182
	Blacksmith	1.640	2.310			41.00%
	Carpenter	1.650	2.150			30.00%
	Engineers	1.610	2.170			35.00%
	Machinists	1.610	2.450			52.00%
	Painters	1.610	2.210			37.00%
	Laborer	1.030	1.320			28.00%	Page 185
Public School Teachers:  1890--$256/year 1910--$492/year 92%

Most of the data in the linked articles are "indexed" for one reason and one reason only, inflation due to paper money.  The data I've focused on is nominal, not indexed.  In other words in actual dollar prices since the value of the dollar did not change from 1850-1910.  An ounce of gold was $20 fixed by law, a $20 gold piece in 1850 was exactly the same as a $20 gold piece in 1910.  Prices for goods and labor rose or fell mostly because of supply and demand.  Prices continually rising for almost all things today is almost entirely a result of vastly increasing the money supply artificially with paper debt, not possible when the value of money did not fluctuate and was actual gold.

Finally, "Unemployment" data was not even collected before 1912.  In spite of the population tripling, and labor force almost quadrupling, wages went up usually more than double while prices dropped with zero taxation other than property tax to run local government.  Of course there was no Social Security, no welfare, no large standing army.  Average Joe never gave a dime to the federal government unless he paid an excise tax like on tobacco or alcohol.  Privacy was actually a real thing. Never a sales tax or fill out any tax form whatsoever.  Especially with railroads connecting the oceans the economy absolutely boomed.  From 1876-1894 there were 3 years with tiny trade deficits, then zero trade deficits until 1970.  To call today's economy the best ever is an absolute joke, if data and history matter to you.  I've found that to most people it does not matter, what matters is their belief which must be defended.  Which is why you should never believe me.

History of Wages in the United States from Colonial Times to 1928--US Dept. of Labor

https://babel.hathitrust.org/cgi/pt?id=uc1.32106007458745&view=1up&seq=5

Historical Statistics of the United States, Colonial Times to 1970, Part 1

chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/https://fraser.stlouisfed.org/files/docs/publications/histstatus/hstat1970_cen_1975_v1.pdf

Historical Statistics of the United States, 1789-1957

https://www.census.gov/library/publications/1949/compendia/hist_stats_1789-1945.html

Chart of US Population 1790-2000

https://www.census-charts.com/Population/pop-us-1790-2000.html

US Federal Spending Since 1792 as Percentage of GDP

https://www.usgovernmentspending.com/federal_spending_chart

Increases in Spending since 1900

https://www.usgovernmentspending.com/past_spending

Total Government as Percentage of GDP--36% estimate

https://www.usgovernmentspending.com/percent_gdp

Debt as Percentage of GDP--Virtually zero in 1860, only 10% of GDP in 1900 after paying off Civil War debt.

https://www.usgovernmentspending.com/debt_deficit_history

Belief is Boss, Rationalize is the Muscle

For most if not all of what you Believe, you must Rationalize. Because we humans are so good at believing, most are experts at rationalizing. So good we can rationalize just about anything.

Here's an interesting common example. "How could somebody possibly believe something so outrageous? They must be stupid." After living most of 4 decades in a cult, and my whole life in society, I can vouch that intelligence has very little to do with belief. But what ground has the comment covered?

The person who made it cannot understand something, the other person's belief, so they come up with a rationalization. The commenter's own belief must be defended, so a conclusion is reached with no evidence whatsoever. No consideration is given to the possibility that their own belief could be incorrect. That's how powerful Belief is, so he hires his best man, Rationalize.

For instance, the person making the comment could believe the Bible. If so they believe a donkey talked, people were raised from the dead, Moses parted the Red Sea simply by raising his staff, people were healed from leprosy, the sun stayed up for 3 days straight, Lot's wife was turned into a pillar of salt, the Nile River was turned to blood....yet they are astounded at someone else's belief, so they must rationalize. At the same time there are very many intelligent people who believe these things, and I don't say they're wrong. But they must rationalize because nobody on this entire planet has ever experienced any of the above. 7.5 billion living data points.

Think how MANY things you have to believe if you are a Democrat or Republican. haha I don't even want to go there!

If you want to see the power of Rationalization, the Milgram Experiment is classic. Milgram tested 40 men between 20-50 years of age. The Nazi's defense at Nuremberg was they were just following orders, so he wanted to see how far people would really go.

Milgram: "The extreme willingness of adults to go to almost any lengths on the command of an authority constitutes the chief finding of the study and the fact most urgently demanding explanation."

"Ordinary people, simply doing their jobs, and without any particular hostility on their part, can become agents in a terrible destructive process. Moreover, even when the destructive effects of their work become patently clear, and they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist authority."

Please read that last sentence again.  

12 minutes, just ask yourself, what did these people Believe, and what did they Rationalize? One hint: The authority figure is in a white lab coat, which helps instill belief. When the test is repeated without the lab coat the results go down. But in the original experiment 65% administered the final, massive 450-volt shock, while all 40 participants gave shocks of at least 300 volts.  Ultimately the men tested were told the other person was an actor, otherwise imagine the guilt they might carry around when nobody was ever really punished.  https://www.youtube.com/watch?v=mOUEC5YXV8U